Rodman & Renshaw notes AMLN hosted a conference call with LLY to discuss the recent FDA alert related to a potential association between Byetta and pancreatitis (Recall that ALKS technology is used inthe 2nd-generation Byetta LAR formulation).
Positively, mgmt stated these deaths were likely the result of complicating medical conditions, with two deaths occurring in patients experiencing complications following gallbladder surgery and a third in a patient suffering a relapse of leukemia. Recall that the Byetta label has included information about pancreatitis since 2006 and in October 2007 the FDA amended the Byetta label to include pancreatitis in the precautions section.
Language was also added to the label providing physicians with information related to the detection of suspected pancreatitis and the appropriate steps that should be taken. Following this new FDA alert, the agency stated that it was working with Amylin and Eli Lilly to add stronger and more prominent warnings in the Byetta label specifically related to the risk of acute hemorrhagic or necrotizing pancreatitis.
Leerink Swann notes AMLN/LLY announced four additional deaths of patients who had taken Byetta. Firm believes none can be reasonably associated with Byetta. Even with these additional cases, firm says the expected risk of pancreatitis among Byetta users is still lower than typically expected for diabetics.
Firm believes the FDA is continuing its recent obsession with avoiding safety risk and any potential political blame at all costs. Firm would view an on-time approval in Sept of the Byetta monotherapy indication as a significant positive catalyst suggesting the FDA sees pancreatitis as background noise and that it plans to continue with business as usual, including its Byetta LAR review.
Citigroup notes the disclosure of 4 additional deaths on Byetta will continue to provide bad press for Byetta and LAR. The concerns about pancreatitis may sour the appetite among primary care physicians and will lead to higher dropout rates in patients with abdominal pain with nausea and vomiting (ie suspected pancreatitis).
Firm continues to believe that investor expectations for Byetta and LAR are too high especially with new upcoming safety warnings.